Naira In Steady Recovery, Down To 340 Against The Dollar

The naira firmed again on Tuesday to trade at 340 against the dollar at the parallel market from 370 on Monday, but traders differ on reasons for the appreciation.

The official market rate remained at 197, with President Muhammadu Buhari’s insistence that the currency would not be devalued.

Speaking with reporters in Lagos, Bureau de Change (BDC) operators were not uniform in justifying the appreciation of the naira. A BDC agent, who asked not to be named, said the N35 million deposited by BDCs to the central bank of Nigeria (CBN) has been refunded, easing capital tension in the market. “We have collected our N35 million, so we have more money to do business with. We can approach some of our sources with money to get dollars,” he said.

However, Musa Tairu, another BDC agent, differed in opinion, saying the appreciation of the naira was due to a drop in demand for dollars by most “big companies”. “Giving us our N35 million doesn’t make any difference now. It depends on the demand and the supply,” Tairu said. “Initially, when our N35 million was with them, we still had our own capital we used for our business. Demand determines the market price. “Most of these big companies are not buying for now. They are really running on a loss. All these BUA, like all these Dangote and co. “The price is not favourable at all. By the time you buy for 390 or three eighty something, the sugar we use to buy for N8,000 now they are selling it N15,000, and people are managing, they are all complaining that it is much. “So all the companies say for now, there’s no buying of anything, they would just be selling the ones they have.” The naira hit all-time highs last week but has been recovering as certainty returns to the market.

The Cable

CBN Recovers N6.2b Illegal Charges From Banks

Commercial banks have refunded over N6.2 billion of illegal charges to customers in 2015 alone, the Central Bank of Nigeria (CBN) has stated.

The apex bank said it has investigated over 6,000 complaints relating to unauthorised bank charges brought to its notice by customers.

A statement by the CBN yesterday said it has received series of complaints from customers of Deposit Money Banks (DMBs) alleging excessive and in some cases illegal charges from their respective banks.

The CBN urged members of the public to “report cases of infringement to enable it investigate and apply sanctions on any erring Deposit Money Bank (DMB).”

Bank customers were reminded to always forward complaints to: Director, Consumer Protection Department via [email protected]

The statement signed by Ibrahim Mu’azu, Director, Corporate Communications said the apex bank will rely on the Revised Guide to Bank Charges which clearly specifies allowable charges for all banking services.

It stressed: “The CBN does not in any way condone the fleecing of banking customers under any guise.”

The apex bank noted that “it was in the quest to provide a strong voice to banks’ customers and moderate the arbitrary charges that the CBN in 2012 established its Consumer Protection Department”, reiterating its resolve to continuously enforce the provision of the Revised Guide to Bank Charges.

CBN Bans Dollar Sale For Overseas Study Fees, Medical Trip

The Central Bank of Nigeria (CBN) has placed a ban on the use of dollar to pay for overseas school fees.

According to Boason Omofaye, the head of business news at Channels television, who made this assertion this morning, overseas school fees and medical tourism have been placed on CBN’s foreign exchange prohibitive list.

By this directive, Nigerians who may need to go outside the country for education purpose or health care will have to get the foreign currency from the parallel market to carry out their engagements.

This reason for this new development could not be ascertained but it may not be unconnected to the weakening state of the Nigerian currency against the dollar on the parallel market.

Only yesterday, experts from all walks of life assembled at a business colloquium to debate if it is imperative to devaluate the naira.

The colloquium, facilitated by The Cable, an online newspaper, took place at the civic centre, Lagos.

Titled “Naira On Trial: To devaluate or Not?” had business tycoons, professionals, analysts, among others in attendance.

The keynote speakers took turns to share their insights on the topic focusing on the merits and demerits of devaluating Naira.

CBN Unveils Guidelines For Operation Of TSA By States

As state governments continue to face intense pressure on their cash flows in the face of dwindling revenues and the need to meet increasing statutory and social responsibilities, the Central Bank of Nigeria (CBN) has released the guidelines for the implementation of treasury single account (TSA) by states.

The TSA, according to the CBN, would be a major component of financial and treasury management reforms being undertaken by the states.

The new circular posted on the central bank’s website yesterday, explained that the central bank introduced the guidelines for states in exercise of its powers, as provided in the CBN Act, 2007, Section 47, sub section 2(2d).

“The objective of this guideline is to provide state governments with a clear framework to support their successful implementation of the TSA initiative, based on standardised banking arrangements, operational processes and IT infrastructure,” it added.

Part of the essential requirements for operating the TSA by states is that government agencies are not to operate any bank account under any guise, outside the purview and oversight of the treasury.

In addition, the central bank explained that under the policy, the consolidation of government cash resources should be comprehensive and encompass all government cash resources, both budgetary and extra-budgetary.

The banking sector regulator listed the two TSA models to include: (The main TSA and associated ledger sub-accounts (where they exist) are to be maintained in a single banking institution; or the main TSA maintained in a single banking institution and associated zero balance ledger sub-accounts (ZBAs) (where they exist) are maintained in other institutions from where balances are swept daily to the main TSA in CBN or the appointed main TSA hosting financial institution.

“Each state government shall select any TSA model of its choice. The choice of a TSA model shall be informed and guided by the availability of clear operational processes and basic technology infrastructure that supports the implementation of the model of choice.

“Each state government shall inform the Governor of the Central Bank of Nigeria of its decision to introduce the TSA scheme, detailing; the state’s preferred TSA model (banking structure) and level of preparedness to commence, operate & support the scheme, which shall include, but not limited to project organisation and resourcing, operational process workflow, available technology infrastructure, etc.

“Each state government shall maintain contractual agreement(s) with parties involved in the design, delivery and ongoing support of its TSA scheme. Such Agreement shall clearly define the terms and the roles and responsibilities of the state government and the relevant parties,” it added.


TSA Hits N2.3trn With 98% Compliance By MDAs

… FG, IMF Urge States To Adopt System
The Office of the Accountant-General of the Federation (OAGF), yesterday said it has mopped up N2.3 trillion  into the Treasury Single Account (TSA).

Its Director of Funds, Mr. Mohammed Dikwa, disclosed this at the opening session of the workshop on TSA in Abuja.

He said with over  17,000 bank accounts being operated at the federal level in commercial banks, government had no choice but to introduce the TSA which has so far helped in mopping up about N2.3trillion into the various accounts maintained and operated at the  Central Bank of Nigeria (CBN).

In similar vein, the Accountant-General of the Federation (AGF), Mr.Alhaji Ahmed Idris, said 98 per cent of the Ministries, Departments and Agencies (MDAs) have complied with the TSA.

He said following government’s February last year directive, all federal MDAs are now on TSA operating their account successfully through the CBN.

Idris said: “As at December 2015, 726 MDAs, which are responsible for almost 98 per cent of the national budget have complied fully.”

According to him, the challenges encountered in the adoption of the TSA were entrenched resistance from banks and the MDAs, which the Federal Government has now overcome.

With the massive compliance, the AGF noted, the new challenge is that of capacity building , and the application of information technology (IT).

In her opening remarks, the Minister of Finance, Kemi Adeosun, who was represented by Mr. Adeseye Shefuye said the  balance, which changes daily as MDAs remit revenues and make payments, according to the latest reports from CBN exceeded N2.2 Trillion.

She said: “I can report that work is now ongoing within the Treasury, to determine how much of these funds can potentially be utilised to part fund the 2016 budget and how much relates to pending commitments. This, of course, will reduce the amount to be borrowed.”

TSA, she said,  has provided government with financial information on the revenues of agencies funded by government and has reduced revenue suppression.

She noted that the information is being used to drive government’s programme to enforce compliance with the Fiscal Responsibility Act and ensure that revenue generating agencies generate expected surpluses and remit to the Federation Account.

Mrs Adeosun said: “TSA has eliminated opportunities for brokerage and other corrupt practices that previously encouraged agencies to accumulate funds with commercial banks rather than apply them to their intended uses.

$40b Drained From External Reserve In 10 years – CBN

The Central Bank of Nigeria (CBN) has lamented that about $40 billion was depleted from the nation’s external reserves in 10 years due to the taste for imported goods by Nigerians.

To stop bleeding  the external reserve, the CBN has urged Nigerians to begin to process raw materials so as to get more value and earn more foreign exchange.

According to the CBN governor Mr Godwin Emefiele, “exported raw materials such as crude, wood, cocoa amongst others whose end products are later imported, are being sold cheaply and bought back at more expensive rates.”

He said the level of the external reserve will be significantly beefed up if fuel which takes up 20 per cent of Nigeria’s import bill is locally produced.

Defending the decision of the CBN to support the real sector, Emefiele said the apex bank “is convinced that the sector has sufficient employment capabilities, high growth potentials, contributes significantly in accretion to foreign reserves, expands the industrial base and diversify the growth potentials of the economy.”

Emefiele said Nigerians must, by now have been tired of hearing people talk about the potentials of Nigeria, adding that now is the time to live that dream. “ We can achieve our goals and give Nigerians the chance to live longer, better and more fulfilled lives,”he said.

To make this possible, the CBN governor appealed “to Nigerians to patronise locally made products to encourage the manufacturers to remain in business, interventions by the bank are centered around agriculture, Micro, Small and Medium Enterprises (MSMEs) and Infrastructure intervention.”

The CBN governor also disclosed that in order to make the real sector attractive to the banking industry, the apex bank has injected over N1.3 trillion into the sector.

Speaking at the annual finance corespondent sand business editors seminar in Ibadan yesterday, Emefiele said the desire to revive and stimulate credit to the real sector was what informed the bank’s efforts to pump such huge amount of financial resources into the real sector.

Represented  by the Deputy Governor, Corporate Services, Adebayo Adelabu, Emefiele noted that by injecting funds and subsidising rates, and through relevant policies, the CBN has assisted in growing the economy and promoting the growth of the different sectors of their economies.

According to Emefiele, the interventions that culminated in the over N1.3 trillion support for the real sector include “the Agricultural Credit Guarantee Scheme Fund (ACGSF),the Commercial Agricultural Credit Scheme (CACS), the Agricultural Credit Support Scheme (ACSS), the N300 billion Real Sector Support Facility (RSSF), the N220 billion Micro, Small and Medium Enterprises Development Fund (MSMEDF), the Small and Medium Enterprises Refinancing and Restructuring Facility (SMERRF), the N75 billion Nigeria Incentive Based Risk Sharing System for Agricultural Lending (NIRSAL), the N213 billion Nigeria Electricity Market Stabilisation Fund and only recently, the Anchor Borrowers’ Programme launched by President Muhammadu Buhari.”

The CBN is also supporting the Nigeria Export Import Bank (NEXIM) with N50 billion export refinancing and restructuring facility as well as N500 billion as non-oil export stimulation facility. “If you add all these it is in excess of N1 trillion that have been deliberately injected into the system to ensure that they are fully resuscitated and they become attractive for commercial banks” Emefiele said.

The Nation

CBN Restriction Of Forex On Imported Goods Has Come To Stay –  Bukola Saraki

President of the Senate, Dr. Abubakar Bukola Saraki has ruled out the possibility of reversing the Central Bank of Nigeria (CBN) policy excluding some imported goods and services from the list of items valid for forex in the Nigerian Foreign Exchange Market.

Saraki, while responding to a request by the Tomato Sub-Sectoral Group of the Manufacturers Association of Nigeria (MAN), seeking his intervention to lift the exemption by the CBN on certain imported goods, said based on the present economic realities, difficult decisions are necessary be taken to overcome the challenges.

The Senate President, who addressed the tomato paste producers when they paid him a courtesy visit in Abuja, said: “It is high time we start telling ourselves the home truth as a nation, we are where we are because of our refusal to take hard decisions.

“As a country, we have to chart a new way different from the past, and that path is going into manufacturing as we cannot continue to remain an import dependent country,” he said.

While challenging the tomato paste producers to focus more on how to be full fledged manufacturers of the product using local raw materials, Saraki expressed surprise that in spite of the high level of local cultivation of tomatoes, the producers were still importing the Triple Concentrate used in the production of tomato paste, which he said  can be produced locally by raising the production level of tomatoes in the country.

“What stops us from producing the tomato to the level of achieving the High Concentrate? You have to be serious in the area of massive investment and research in the sector for government to consider any concession for you,” Saraki said.

Earlier, the leader of the group, Mr. Femi Gbadegun said though they were not against the CBN’s policy restricting forex to some imported items but that they needed time to raise the level of tomato production in the country to eliminate the need for importation.

Gbadegun lamented that the policy had adversely affected the operations of the members of the association.

N50 Stamp Duty: CBN Exempts Salary Accounts, Others

Payments of salaries and wages as well as payments and deposits for self-to-self transactions whether inter or intra bank are exempted from the N50 stamp duty policy, the Central Bank (CBN) has said.

Malam Ibrahim Mu’azu, CBN Director, Corporate Communications, made the clarification on Thursday in Abuja in a statement issued to newsmen.

NAN recalls that the CBN recently introduced the policy which was contained in the Stamp Duty Act, 2004 and the Federal Government of Nigeria’s Financial Regulation of 2009.

The policy is part measures to boost tax revenue for the federal government.

The statement said that charge was on all receipts issued by banks or financial institutions in acknowledgment of services rendered in respect of teller deposits and electronic transfers for a value of N1,000 and above.

“The implementation of the Stamp Duty at this point in time emanated from a Federal High Court order that the CBN should direct deposit money banks under its supervision to commence the collection of the duty on behalf of the federal government.

“Consequently, the money deposit banks have been directed to commence the collection of the duty.

“Banks are to collect the N50 stamp duty and remit same to the Nigerian Postal Services (NIPOST) on behalf of the customer.

“The N50 stamp duty is charged per transaction and NOT per volume. Hence, irrespective of the amount, the sum of N50 is to be charged provided such a transaction is N1,000 and above.

“There are however some exemptions and these include payments of salaries and wages, payments and deposits for self-to-self transactions whether inter or intra bank among others,’’ the statement said.